US NSPM-2 — Restoring Maximum Pressure on the Government of Iran

Mechanism

NSPM-2 is a directive memorandum, not itself a sanctions instrument: it operates by instructing the Treasury, State Department and DOJ to use their existing statutory authorities (IEEPA, the Iran Sanctions Act, CAATSA, the Iran Threat Reduction and Syria Human Rights Act, and the post-2018 Executive Orders 13846/13871/13902/13949 reimposing the JCPOA-era architecture) more aggressively. It re-establishes the "all-of-government" posture of the 2018-2020 first-term campaign:

• Crude-export choke-point. OFAC tracking of dark-fleet tankers

(AIS-spoofing, ship-to-ship transfers, flag-hopping); pressure on PRC independent refiners that processed ~90% of Iranian export crude in 2023-24.

• Secondary sanctions. SDN designation of non-US (especially PRC,

UAE, Hong Kong, Singapore) traders, brokers, banks and refiners found to facilitate Iranian energy exports; correspondent-banking cut-off under §1245 NDAA / IFCA.

• Waiver review. The Chabahar port waiver (granted by the State

Department to India in 2018 to develop the Iran-India trade corridor) is explicitly flagged for review/rescission.

• Snapback diplomacy. Direction to State to "lead a diplomatic

campaign" at the UN Security Council to invoke the JCPOA snapback mechanism (which restores the pre-2015 UN sanctions architecture on Iran). The snapback window expires when Resolution 2231 sunsets in October 2025.

• Asset impoundment. AG-led DOJ campaign to seize Iranian oil

cargoes mid-transit (precedent: 2020+ Grace 1 / Adrian Darya 1 detentions) and to satisfy outstanding US-court judgments by terrorism victims (~USD 50bn+ outstanding).

Downstream implications

• Global crude price floor. Removing 1.5-1.8 mbd of Iranian

exports tightens the OPEC+ residual; OPEC+ spare capacity (~5 mbd held by Saudi Arabia, UAE, Iraq) becomes the marginal swing supply. Material upside risk to Brent if compliance is enforced rigorously.

• PRC teapot refiner risk. Shandong-cluster independent

refiners (Shengxing, Luqing, Yanchang, Hebei New Star already designated) face SDN exposure, secondary-sanction risk on USD-clearing banks, and potential Sinopec/CNPC withdrawal of feedstock supply contracts. Real disruption channel into PRC refining margins (~USD 3-5/bbl Iranian crude discount removed).

• Insurance and shipping. P&I-club exposure to Iran-trading

tankers; flag-of-convenience registrars (Cook Islands, Cameroon, Comoros) under pressure. UK / EU correspondent-bank chains for ship-finance restricted.

• India / Chabahar exposure. India's strategic-corridor port

investment at Chabahar (~USD 370m committed by India Ports Global Ltd / IPGL via 10-year operating contract signed May 2024) becomes a sanctions-compliance question; affects India-Iran- Afghanistan trade route and India-US strategic-trade dialogue.

• Snapback geopolitics. UK/France/Germany (E3) coordination on

snapback determines whether the UN Security Council architecture reverts to pre-2015 multilateral sanctions or whether Russia/China veto-pivot blocks it (procedurally snapback is automatic without UNSC vote, but enforcement is voluntary).

• Iran-Russia coupling. Tighter Iran sanctions push Iran further

into the Russia-China-DPRK alignment; expect joint sanctions-evasion infrastructure (CIPS, SPFS, alternative- insurance pools) to develop further.

Open questions

• Will PRC retaliate against secondary sanctions on its teapot

refiners (e.g., via the Anti-Foreign Sanctions Law / countermeasure list — see [2025-03-23-china-state-council-afsl-implementation-regulations])?

• Does the snapback get triggered before the October 2025 sunset

window closes, and do Russia/China formally reject it?

• What share of the 1,000+ post-NSPM-2 OFAC designations are

effective vs. nominal (i.e., touch dollar-clearing exposure vs. Iran-only counterparties already outside USD)?

• Does Iran's response include a JCPOA-walkout / 90% enrichment

acceleration or asymmetric (Houthi proxy) escalation?